Truly “driver-owned” auto insurance companies already exist within the private sector. Mutual insurance companies are owned by their policyholders. If, at the end of a fiscal year, the mutual insurance company declares a profit, the profit is shared among the policyholders. Conversely, if a mutual insurance company declares a loss, there are provisions for all policyholders to be assessed a levy to make up for this shortfall. Insurers provide car insurance within a strict framework of provincial laws and, because of that, insurance systems cost what they cost whether they are owned by government or the private sector.
Because the laws vary according to region, comparisons are not valid; one can’t compare the no-fault system of Manitoba, for example, to the tort system that might be implemented in NS by a government-run insurer.
Nova Scotia premiums are competitive with those of the Prairie provinces in terms of dollar costs. However, when it comes to what consumers get for those premiums, the people in Nova Scotia are better protected with richer benefits and higher claims payouts.
Government insurers also change rating territories as a way of increasing rates for consumers without applying for a rate increase. Rating territories have been changed in BC frequently in recent years. In November 2002, ICBC made a number of dramatic changes to its rating territories, unilaterally moving thousands of motorists into higher-priced territories. This resulted in these motorists’ rates increasing dramatically, some by as much as 30%. These are the kind of backdoor rate increases given to the public by government-run auto insurers who have had their “front-door” rate increases capped or limited by regulations or the politics of an election campaign.
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